Management Accounting Decision-Making Q&A Sample

Introduction To Management Accounting Decision-Making

Question 1

Early in the 1990s, Robert Kaplan and David Norton established the Balanced Scorecard (BSC), an organizational structure for strategic performance management. By helping them translate their organisational goals into a set of credible performance criteria, the BSC connects multiple divisions and procedures to fulfil organisational goals.

Outline of Kaplan and Norton's Balanced Scorecard Model

• Financial Perspective: This perspective, which takes into account metrics like sales, profitability, return on expenditures, and cost management, is cantered on the financial achievements of an organization. Management guarantees that the corporation's financial objectives and strategy are in line.
• Customer Perspective: This viewpoint looks at customer loyalty and satisfaction. Feedback from consumers, market share, and retention of consumers are a few examples of metrics. Marketing aids in determining how successfully the company is fulfilling the demands and desires of its clients (aicpa-cima.com, 2023).
• Internal Process Perspective: This viewpoint examines the internal processes and procedures that power the company. Cycle period, quality, efficiency, and inventiveness are a few examples of metrics (Saukkonen et al. 2018). Enhancing internal processes is the goal to satisfy consumers and turn a profit.

Evolution of the Balanced Scorecard Model

• Integration of Sustainability: Sustainable development and corporate social responsibility (CSR) are now included in the Balanced Scorecard due to contemporary research and trends. These days, businesses take operating and financial metrics into consideration in addition to their social and environmental performance.
• Technology Integration: More real-time gathering and interpreting of data is now possible because of technological advancements. As per the narration and explanation of Maelah et al. (2021), businesses are continually updating and managing their BSC measurements by utilizing programs and information analytics.
• Cascading Scorecards: The idea of cascading rankings has become more popular. Management entails coordinating the BSC across different organizational levels and making sure that each accomplishment statistic contributes to the accomplishment of higher-level goals.

The usefulness and applicability of the Balanced Scorecard in numerous business and organizational contexts are still being investigated by current studies, resulting in continuous enhancements and advances in its use (Gamarra et al. 2018). The BSC is still a useful tool in today's intricate and quickly evolving business atmosphere for strategic planning and performance evaluation. The aforementioned perspective concentrates on the ability of the organization to develop, learn, and develop (Rikhardsson and Yigitbasioglu, 2018). Employee education, growth of skills, and flexibility are examples of metrics. Additionally, it highlights how important organizational interpersonal relationships are to performance.

Need expert assistance with your assignments? Our Team of Online Assignment Helpers for Every Need is here to provide top-quality support across various subjects.

Question 2

ITV is a media and leisure firm that works mostly in the field of broadcasting. The company's objectives along with efficiency in this particular area should be taken into account when choosing key indicators of performance (KPIs) for the top executives of an ITV broadcasting sector (itvplc.com, 2023).

Audience Ratings and Share

• Matrix: Both audience share (% of total viewers) and regular audience statistics (daily, weekly) are provided.
• Justification: These measurements aid in deciding how well-liked ITV's entertainment is. Strong audience response to the information is critical for advertising income and perception of the company, as seen by favourable reviews and sharing.

Ad Revenue and CPM (Cost per Thousand Impressions)

• Matrix: Cost per Thousand Impressions for ad and total earnings from advertisement.
• Justification: A substantial source of income for broadcasters such as ITV is ad revenue. The efficiency of ad sales tactics and the cost of advertisements may be evaluated by keeping an eye on earnings and CPM.

Content Production Costs

Matrix: The price per hour with distinctive content and ITV's customer satisfaction.

Justification: The effectiveness of content generation is gauged by this KPI and manufacturing expenses must be controlled and optimized since excessive expenditures have the potential to hurt profitability.

Viewer Engagement

• Matrix: Digital platform viewer involvement (social media activity, downloads of applications, internet watching).
• Justification: Monitoring viewer interaction enables ITV to modify its program delivery and marketing tactics to optimize engagement and cultivate a devoted digital following as viewing behaviour progressively moves to digital platforms. This viewpoint, which is centred on an organization's financial successes, considers measures like revenue growth, profitability, return on investing, and cost control. Management ensures that the company's strategy and economic objectives are aligned.

Program Quality and Awards

• Matrix: Frequency of ITV program awards both won and nominated.
• Justification: Recipients of industry awards and nominees attest to the calibre and standing of ITV's written material, which draws in both advertisers and audiences.

Content Diversity and Inclusivity

• Matrix: A percentage of programming that is multicultural and inclusive.
• Justification: In addition to being morally right, fostering inclusiveness and diversity may improve a company's reputation and attract a more extensive clientele.

Technical Quality

• Matrix: Resolutions uptime and quality of the transmitted signal.
• Justification: Making sure broadcasts are technically sound is crucial to giving viewers a satisfying experience. Regular technological problems can cause loss of money and audience displeasure.

Subscriber and Viewer Retention

• Matrix: Churn rates for viewers and subscribers.
• Justification: A broadcasting sector's sustainability in the future depends on its high levels of retention Ahmed (Mohamed Ghandour, 2021). Profitability, as well as revenue, may be positively impacted by lowering attrition and keeping viewers and subscriptions.

Market Share and Competitor Analysis

• Matrix: Share of the market of ITV about rivals.
• Justification: Analyzing market share facilitates evaluating ITV's comparative standing and pinpointing opportunities for expansion and enhancement.

Streaming and On-Demand Metrics

• Matrix: ITV's user engagement metrics, content libraries, and number of subscribers.
• Justification: Live streams and services that are on-demand are becoming more and more significant as the media environment changes. Keeping an eye on these variables enables ITV to adjust to shifting audience tastes.

These KPI measurements offer a thorough understanding of the success of ITV's broadcasting company operations, including everything from viewership ratings and income to technological aspects, quality, and diversity (Dahal, 2019). By utilizing these measures, management may make intelligent choices to maximize their plans and programming operations, guaranteeing that they are competitive in the dynamic media landscape.

Get Extra 10% OFF on your WhatsApp order!

use my discount

Question 3

Media firms like ITV ought to give close attention to their social purpose, which is also referred to as social responsibility as a business, or CSR, for several purposes.

• Audience Engagement and Loyalty: Putting the greater good front and centre can increase consumer loyalty and engagement. Media firms can develop a stronger connection with their target demographic and increase brand loyalty by tackling issues about society (Lutsyk et al. 2020).
• Reputation Management: A media business's credibility is enhanced by being a good corporate citizen and attending to social issues. Building a good character may help get a greater amount of confidence, which is important in a field where authenticity is everything.
• Compliance and Regulation: Media businesses are either required or encouraged to get involved with socially responsible practices by several national codes guidelines and legislation (Ostaev et al. 2020). In addition to being required by law, following these regulations is in line with ITV's objective to change the world for the better.
• Talent Attraction and Retention: Prestigious talent might be drawn in by an unwavering dedication to social purpose. Individuals are drawn to companies that are having a significant influence (Horvat and Mojzer, 2019). For innovation and content generation, it's important that keep knowledgeable and driven staff members.
• Advertising and Sponsorship Opportunities: Partnerships with socially conscious news outlets are frequently preferred by businesses seeking to sponsor or advertise in content. Partnership and advertising income may rise as a result.
• Risk Mitigation: Media firms may reduce their exposure to PR issues and boycotts, and controversy by participating in social purpose activities (londonstockexchange.com, 2023). Acknowledging social concerns early on might help avoid any adverse reaction.
• Market Differentiation: A compelling social mission may set ITV apart from the competition in the cutthroat media industry and draw in a larger viewership.

Evaluation Criteria for the Broadcasting Department of ITV (or a similar media Company) concerning the Environment, Society, and Governance (ESG) and Corporate Social Responsibility.

Diversity and Inclusion Metrics

The amount of different workers in the workforce as well as a representation of varied groups in on-screen performers and production jobs behind what happens behind the scenes.

• Business Case: Studies have indicated that diverse and inclusive workplaces and content attract greater numbers of viewers and are hence more desirable to audiences (Labrador and Olmo, 2019). Organizations with various management teams are 33% more likely to achieve industry-leading profitability, according to a study released by McKinsey & Company research.

Sustainability Metrics

Goals for reducing greenhouse gas emissions, as well as activities for conservation and trash reduction.

• Business Case: The daily activities of media firms have the potential to have a major environmental impact. In addition to showing an obligation to environmental sustainability, cutting carbon dioxide emissions and properly managing trash may also save money.

Community Engagement Metrics

Amount of funds and hours of labour provided by volunteers committed to community projects and impact evaluations of neighbourhood programs.

• Business Case: ITV's brand is improved, empathy is fostered, and audience sponsorship and advertising partnerships may result from its involvement with communities and backing of local activities.

Ethical Content Metrics

Keeping an eye out for moral dilemmas in the material, such as avoiding negative stereotypes and providing a way for viewers to voice their opinions.

• Business Case: Consumers respond favourably to ethical material, which also averts disputes or negative publicity that might harm a company's standing and bottom line.

Educational and Public Service Content Metrics

Quantity and calibre of governmental and educational programs, audience interaction and effect evaluation.

• Business Case: Providing instructional resources shows a dedication to the general welfare, supporting a societal objective and fostering a well-informed and involved community.

Transparency and Accountability Metrics

Annual report disclosure includes ESG and corporate social responsibility results and efforts, as well as governance practices including diversity among boards and independence.

• Business Case: Openness and transparency foster trust among those with interests, such as lawmakers, investors, and viewers, which ultimately lets the organization, succeed in the years to come.

Partnerships and Alliances

Quantity, calibre of collaborations with non-governmental organizations and other interested parties.

• Business Case: Media organizations may increase their social effect and expand their influence by working together with reputable organizations that tackle social concerns.

Through implementing these objectives into their operations, media businesses such as ITV can ensure that they help to good social change while protecting their future viability and prosperity. This is in line with the industry's overall trend towards ESG and CSR activities (Ciuhureanu, 2018). Business cases and scholarly research demonstrating the advantages of an environmental emphasis in the media sector support these initiatives. By utilizing these measures, management may make well-informed decisions to maximize their plans and programming operations, guaranteeing their competitiveness in the dynamic media landscape.

Reference list

• Ahmed Mohamed Ghandour, D., 2021. Analytical review of the current and future directions of management accounting and control systems. European Journal of Accounting, Auditing and Finance Research, 9(3), pp.42-73.
• Ciuhureanu, A., 2018. Management accounting–Managerial obligation or need. Land Forces Academy Review, 23(4), pp.282-287.
• Dahal, R.K., 2019. The changing role of management accounting in the 21st Century. Review of Public Administration and Management, 7(3), pp.1-8.
• Gamarra, M.J.C., Lassoie, J.P. and Milder, J., 2018. Accounting for no net loss: A critical assessment of biodiversity offsetting metrics and methods. Journal of environmental management, 220, pp.36-43.
• Horvat, T. and Mojzer, J., 2019. Influence of company size on accounting information for decision-making of management. Naše gospodarstvo/Our economy, 65(2), pp.11-20.
• Labrador, M. and Olmo, J., 2019. Management accounting innovations for rationalizing the cost of services: The reassessment of cash and accrual accounting. Public Money & Management, 39(6), pp.401-408.
• Lutsyk, J., Diachenko, S., Kyrychenko, S., Kotsyuruba, V. and Tkach, I., 2020. Accounting policy of the government sector entity at the current stage of accounting systems development in accordance with international standards. VUZF review, 5(1), p.38.
• Maelah, R., Al Lami, M.F.F. and Ghas, G., 2021. The usefulness of management accounting information in decision making among SMEs: the moderating role of cloud computing. Asia-Pasific Management Accounting Journal, 16(1), pp.59-92.
• Meiryani, M., Gilberta, G., Arshanty, R., Lindawati, A.S.L. and Liawatimena, S., 2021, December. The Effect of Management Accounting Information Systems and Decision Making on Managerial Performance. In Proceedings of the 2021 5th International Conference on Software and e-Business (pp. 86-92).
• Ostaev, G.Y., Suetin, S.N., Frantsisko, O.Y. and Alexandrova, E.V., 2020. Assessment of the effectiveness of the management of agricultural organizations in management accounting. Amazonia Investiga, 9(28), pp.260-271.
• Rikhardsson, P. and Yigitbasioglu, O., 2018. Business intelligence & analytics in management accounting research: Status and future focus. International Journal of Accounting Information Systems, 29, pp.37-58.
• Saukkonen, N., Laine, T. and Suomala, P., 2018. Utilizing management accounting information for decision-making: Limitations stemming from the process structure and the actors involved. Qualitative Research in Accounting & Management, 15(2), pp.181-205.

Website

• aicpa-cima.com, 2023. Case study. Available at: https://www.aicpa-cima.com/resources/article/balanced-scorecard-case-study [Available on: 25th October, 2023]
• itvplc.com, 2023. Annual report. Available at: https://www.itvplc.com/investors/results-centre/reports-and-results-archive/2022 [Available on: 25th October, 2023]
• londonstockexchange.com, 2023, News and prices. Available at: https://www.londonstockexchange.com/market-data/all [Available on: 25th October, 2023]